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GEORGE TOWN (March 10): The Penang government should scrap the quit rent revision as the state’s first adjustment in three decades is based on a flawed framework, said a grouping of Chinese businessmen.
The revised structure undermines basic principles of taxation and risks discouraging investment, Datuk Seri Choot Ewe Seng, the president of Penang Chinese Chamber of Commerce, said in a statement on Tuesday.
"The methodology adopted raises serious concerns over administrative efficiency, fairness, and long-term fiscal sustainability,” he said.
The statement adds to the growing calls against the revision, including the former Penang chief minister Lim Guan Eng who has highlighted cases where quit rent surged by as much as 3,000 times.
Established in 1903, the Penang Chinese Chamber of Commerce represents more than a thousand members registered as individuals, corporations as well as commercial associations and trade guilds from sectors ranging from financial institutions to retailers.
For the association, the core issue is the decision to link quit rent calculation to actual usage of land, requiring district land officers to physically inspect private properties and verify on-site activities, Choot said.
"A well-designed tax system should be collected efficiently with minimal administrative and compliance costs,” he said. “By relying on physical inspections, the state government risks creating a highly resource-intensive system.”
He argued that land use is rarely static, noting that agricultural land may remain idle, residential premises may host small businesses, and temporary activities may change throughout the year.
“Without continuous monitoring, the system risks becoming inconsistent and arbitrary," he said, warning that the cost of enforcing such an inspection regime may significantly reduce the net fiscal benefits generated by the policy.
"A system relying heavily on field observations inevitably introduces subjective interpretation, leading to disputes and perceptions of unequal treatment," Choot added.
Chief Minister Chow Kon Yeow has defended the revisions as necessary to correct inequities arising from rates being unchanged since 1994, with some township classifications unaltered since 1966.
In one Seberang Perai Selatan case cited by Chow, a commercial landowner previously paying only RM48 annually based on agricultural rate is now charged RM44,900 in quit rent. He also pointed out that less than 1% of landowners — about 300 out of 370,000 — have submitted appeals to date.
Choot urged the state to adopt an approach based on objective criteria such as land title category, land size, and assessed land value, rather than physical inspections. He also recommended a gradual revision with advance announcement, a transparent formula, and minimal administrative intervention.
Further, the state should form a Quit Rent Policy Review Committee and consider the added burden of assessment payments on landowners, he added.
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